ILS funds news, insurance linked securities or ILS fund news

Direct incurred insured losses from the recent Camp and Woolsey wildfires in California have already passed $9 billion, according to the state Insurance Commissioner.

U.S. primary insurance giant Allstate has already paid over $1.2 billion in gross claims from the recent devastating California wildfires, but on a net basis after reinsurance recoveries and reinstatements the company estimates its loss from the Camp and Woolsey Fires at $670 million before tax.

Pricing for industry-loss warranty (ILW) backed retrocessional reinsurance protection has not shifted significantly since the aggregation of recent catastrophe loss events, with brokers still pitching capacity at the same rates as prior to the wildfires, sources have told us.

Robert Reville, Chief Executive Officer (CEO) of Praedicat, an InsurTech risk modelling and analytics company for casualty re/insurers, has claimed that the company’s approach to disease litigation may create an opportunity for ILS to enter into the casualty space.

The returns on aggregate insurance-linked securities (ILS), including catastrophe bonds, are being questioned by some investors, following the significant number of catastrophe loss events that have qualified under some contract terms in the last two years.

OppenheimerFunds, Inc, the asset manager that is in the process of being acquired by investment giant Invesco to create a $1.2 trillion global powerhouse, has grown the catastrophe bond and related insurance-linked security (ILS) assets under management of its flagship cat bond fund.

The recent selling off of catastrophe bonds, which has largely provided a mechanism for ILS fund managers to free up capital to put towards renewal deals, has resulted in much higher secondary market trading volumes but this has added mark-to-market price pressure and as a result dented total returns.

QBE, the Australian headquartered insurance group, has avoided any reinsurance rate increases following the recent catastrophe events by going to market early with a 2019 renewal that has come in cheaper while adding $1.1 billion more occurrence limit.

The $200m Cal Phoenix Re Ltd. (Series 2018-1) catastrophe bond, which was sponsored by now under-pressure California electrical utility PG&E, has become the subject of a significant amount of interest from a range of investors and law firms that see a potential opportunity to speculate on its fate or divert the collateral funds.

Capital markets investors that participate in the ever-growing catastrophe bond and ILS space are having to rethink the wildfire peril, as its contribution to risk within multi-peril aggregate deals is on the rise, according to catastrophe risk modeller RMS.